By Monica Chen

mchen@heraldsun.com; 419-6636

DURHAM -- Communications giant Avaya Inc. has won the bid to acquire the bankrupt Nortel Networks Corp.'s Enterprise Solutions business for $900 million in cash, the companies announced Monday.

Avaya is setting aside an additional $15 million for an employee retention program, the company said. That may help keep many of the 1,850 workers left at Nortel's facilities at Durham's Research Triangle Park, where there is a substantial presence of workers in the Enterprise business, including the top executive of the division, Joel Hackney.

Hackney said in a released statement that it will be "business as usual" as the two companies sort out details of the acquisition.

"This will empower us to continue to deliver industry-leading solutions and services focused on unlocking the enterprise business potential enabled by unified communications," Hackney said. "We will ensure our customers can fully leverage their existing Nortel investment as they benefit from the complementary capabilities of the Nortel and the Avaya portfolio of products and services."

The Enterprise unit is the corporate networks business of Nortel. Avaya is also getting Nortel Government Solutions and DiamondWare Ltd. in the transaction.

While Nortel's business has been involved in multiple levels of communications deliveries, New Jersey-based Avaya is mainly focused on corporate communications, providing unified communications, contact centers and related services.

Nortel and Avaya also have complementary strengths in delivering communications in the U.S. Federal Government market, Nortel said.

Avaya had previously offered to buy the component in July with a $475 million "stalking horse" bid, which is an initial bid from an interested buyer chosen by the bankrupt company.

Avaya spokeswoman Lynn Newman said details of the employee retention program are still pending.

"That's going to be used for employees across a variety of Nortel organizations, for those roles that we would consider critical," she said.

Nortel spokesman Jay Barta declined to comment on how this transaction will affect RTP employees.

Nortel's RTP campus is the company's hub for Customers, Competitiveness and Services, the Networks Operations Center. It is a center of excellence for Global Operations, and also has a large Services presence as well as corporate functions such as HR, Finance, IS and Communications, Sales and Marketing, Research & Development and an Emergency Recovery Center.

There are now 1,850 employees at the RTP site. That's down from 2,100 employees in February, mostly as a result of layoffs and attrition, Barta said.

The communications giant has been cutting back for years since the 1990s telecom and Internet boom. At its peak, the company employed 8,500 workers in RTP.

The Avaya transaction is still subject to court and regulatory approvals and could close later this year. The company employs about 16,000 people worldwide.

Nortel had filed for Chapter 11 with the U.S. Bankruptcy Court in Delaware on Jan. 14, a day before a scheduled $107 million debt payment.

Since then, the Enterprise Communications division is the second component of the company to have announced a buyer.

In July, Ericsson won a bid to buy Nortel's wireless assets for $1.13 billion. The divisions taken by Ericsson and Avaya together comprise more than half of Nortel, according to Barta.

Nortel has also opened Metro Ethernet Networking Solutions and Carrier VoIP and Applications to bids. The company has not announced bidders for those divisions.